This document analyzes the commercial banking sector in Pakistan by categorizing banks based on assets and examining their performance metrics like profits, non-performing loans, assets, and CASA ratios. Large banks like HBL and MCB performed well with increased profits and improved CASA ratios and asset quality. NBP struggled with low profits and increased bad loans. Medium banks like SCB and new entrants performed well, while Askari and Summit Bank had high costs. Islamic banks improved profits and ratios compared to prior years. The banking industry faces high taxes affecting profitability and attracting new entrants. Recent updates include Meezan Bank acquiring HSBC Pakistan and potential Habib Bank acquisition of Barclays Pakistan operations.

1. Commercial Banking in
Pakistan
Presenters:
Muhammad Zeeshan Azam
Fazeel Ahmed

2. Defining Banks in Terms of Assets
According to Pakistani Context, Banks have been divided into
4 categories depends upon the assets:
1. Large Banks: total assets exceeding Rs 500 Bln
2. Medium Size Banks: total assets between Rs100 Bln –
Rs500 Bln
3. Small Banks: Total Assets less than Rs100 Bln
4. Islamic Banks: Any bank possessing above assets (either
small, medium or large) using Islamic Operations

3. Number of Banks and Branches
Large Banks Short Name
Number of
Branches (2013)
Habib Bank Limited HBL 1546
National Bank of
Pakistan
NBP 1342
United Bank
Limited
UBL 1283
MCB Bank Limited MCB 1208
Allied Bank Limited ABL 948
Bank Alfalah
Limited
BAF 423
Total 6750

4. Product B
• Feature 1
• Feature 2
• Feature 3
Medium Banks Short Name
Number of Branches
(2013)
Bank Al-Habib BAH 320
Standard Chartered Bank SCB 116
Askari Bank Limited Askari 281
Bank of Punjab BOP 334
Faysal Bank Limited Faysal 269
Habib Metropolitan Bank HMB 174
Meezan Bank Limited Meezan 351
NIB Bank Limited NIB 179
Soneri Bank Limited Soneri 239
Summit Bank Summit !87
JS Bank Limted JS 211
Bank of Khayeber BOK 100

5. Small Banks Short Name Number of Branches
(2013)
Sindh Bank Sindh 200
Silk bank Limited Silk 88
Citibank Citi 3
Bank Islami Pakistan
Limited
Islami 201
Al-Baraka Bank Limited Albaraka 110
Dubai Islamic Bank Limited DIB 125
HSBC Bank HSBC 10
Barclays Bank Barclays 7
Burj Bank Burj 75
Samba Bank Limited SAMBA 28
Deutsche Bank Limited DB 3
Industrial & Commercial
Bank of China
ICBC 2
Bank of Tokyo BOT 1

6. Large Banks
Analysis

7. The Comparison of Banks at Different
Levels
0
5000
10000
15000
20000
25000
30000
35000
40000
HBL NBP UBL MCB ABL BAF
Profit Before Taxation
PBT 2013 PBT 2012

8. Non Performing Loans
Large Banks:
• NBP has not improved its position. In 2012 NBP
nonperforming loan ratio was 12.6% now in 2013 its ratio
has increased to 16.3 %
• MCB has improve its ratio from 9.7% in 2012 to 8.7 % to
2013.
• BAF,ABL and UBL have improve their nonperforming loans
to great extent.
• HBL has also shown great improvement in recovering non
performing loan there non performing loan has decrease to
9.2 % in 2013 from 10.9% in 2012 .

9. 0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
HBL NBP UBL MCB ABL BAF
Total Assets of Banks

10. 0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
HBL
NBP
UBL
MCB
ABL
BAF
CASA Comparison
2012 2013

11. Medium Banks
Analysis

12. -10,000
-5,000
0
5,000
10,000
15,000
20,000
BAH SCB Askari Faysal BOP
Profit Before Taxation
PBT 2013 PBT 2012

13. -3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
Profit before Taxation
PBT 2013 PBT 2012

14. 0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
BAH SCB ASKARI FAYSAL BOP
Assets Comparison
Assets 2013 Assets 2012

15. 0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
HMB NIB SONERI SUMMIT JS BOK
Total Assets
2013 2012

16. 0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
BAH
SCB
Askari
Faysal
BOP
HMB
CASA Comparison
2012 2013

17. 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%
HMB
NIB
Soneri
Summit
JS
BOK
CASA Comparison
2012 2013

18. Non Performing Loans
• SCB performed very well
• They reduced their non performing loans to 14.8% in 2013
from 16.2 % in 2012 .
• Summit banks also reduce their non performing loans to
28.6% in 2013 from 16.2 % in 2012.
• JS and BOK have also reduce their non performing loans, on
the other hand Askari bank and BOP do not perform well
in recovering loan their non performing loan has increase
as compare to last year.

19. Small Banks
Analysis

20. -2,000
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Profit Before Taxation
PBT 2013 PBT 2012

21. -400
-200
0
200
400
600
Samba DB FWB BOT
Profit Before Taxation
2013 2012

22. 0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Total assets Comparison
2013 2012

23. 0
10,000
20,000
30,000
40,000
50,000
SAMBA DB FWB BOT
Total Asset Comparison
2013 2012

24. 0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
Silk
Sindh
ICBC
CITI
Barclays
HSBC
CASA Comparison
2012 2013

25. 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%
Samba
DB
FWB
BOT
CASA Comparison
2012 2013

26. Non Performing Loans
• The non performing loan ratio is not very high if we
compare it with medium size and large size banks .
• There is great improvement as compared with previous
year.
• Silk bank non performing loans in 2012 was 20.0% and in
2013 its nonperforming loans is 16 % .
• Al Baraka shown great improvement, their non performing
ratio in 2012 is 19.3% and in 2013 is 13.2 %.
• Citi bank also improve its ratio it non performing loans in
2012 is 25.4% and in 2013 is 2.8% .

27. Islamic Banks
Analysis

28. -3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Meezan AlBaraka Islamic
Banks
DIB Burj
Profit Before Taxation
PBT 2013 PBT 2012

29. 0
50,000
100,000
150,000
200,000
250,000
300,000
350,000 Total Assets Comparison
2013 2012

30. 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%
Meezan
AlBaraka
Islamic Banks
DIB
Burj
CASA Comparison
2012 2013

31. Changes occurred in Commercial Banks
• The banks that were losing money due to inefficiencies, waste and
limited product range have become highly profitable business.
• The quality of new assets has improved as tough measures are taken
to evaluate new loans
• Credit Information Bureau reports provide updated information to
the banks about the credit history and track record of the borrowers
• Banking Technology that was almost non-existent in Pakistan until a
few years ago

32. • Average spread of large banks in 2013 was 5.5% as compared to 7%
in 2012.
• Average spread of medium sized banks in 2013 was 4.3% as
compared to 5.2% in 2012.
• Average spread of small banks in 2013 was 4.1% as compared to
5.5% in 2012.
• Average spread of Islamic banks in 2013 was 6.4% as compared to
7.6% in 2012.

33. Spread Rates EPS
Large Banks 2013 2012 2013 2012
HBL 4.7 6.3 17.2 17
NBP 6 7 2.5 7.3
UBL 5.3 6.7 15.8 15.7
MCB 6.3 8 21.6 20.6
ABL 5.4 7.2 14.3 11.4
BAF 5.2 6.2 3.5 3.4
Medium Banks
BAH 3.5 4.5 5.1 5.4
SCB 8.2 9.1 2.7 1.5
ASKARI 4.1 5.5 -6.2 1.5
BOP 2.2 1.6 1.8 1.4
FAYSAL 6.1 6.7 2.3 2.8
HMB 4.1 4.9 4 3.5

34. Small Banks 2013 2012 2013 2012
Sindh 6.8 7.7 -0.4 -0.1
Silk 4.4 6.4 0.7 0.9
Citibank 4.6 7--- ---
HSBC 3.6 5--- ---
SAMBA 3.1 5.1--- ---
ICBC -1 5.8--- ---
Islamic Banks
Meezan 4 3.5 3.6 5.2
AlBaraka -0.1 -0.7 3.5 2.5
Islami 0.4 0.6 5.4 6.6
DIB 0.2 0.5 10.4 12.7
Burj -1.5 0.1 8.9 11.1

35. 0
5
10
15
20
25
30
35
40
Large Banks Medium Banks Small Banks Islamic Banks
Loans & Advances Market Share
2013 2012

37. Concluding Remarks
LARGE BANKS
• HBL performed very well as compared to other banks .
• PBT has increased, non performing loans has reduced, CASA ratio
has improved
• MCB is also performed very well they increased their CASA ratio, It
has highest CASA ratio in 2013. MCB has highest EPS in 2013.
• NBP performed very poor in 2013, their PBT is very low and their EPS
is very low, their non performing loans has increased .
• UBL , ABL and BAF have good performances as compared them with
their past year performance .

38. MEDIUM BANKS
• New entrants performed very well like NIB,BOK,HMB, and
BAH
• SCB performed very well as compared, their CASA ratio is
the highest in all the medium size banks. They reduced
their operating cost and performed very well in CY2013.
• Askari bank , Summit bank , Soneri and JS bank had high
operating cost
• Meezan bank performed very well in medium size banks
• They maintain their assets and has good EPS as compared it
with other banks.

39. • ISLAMIC BANKS
• Islamic banks performed very well in CY 2013
• Their CASA ratio has improved, their non performing
loans as reduced and their assets has increased .
• Islamic banking is the new concept in banking and
people are showing great interest toward them.
• Meezan bank performed very well if we compare it
with other islamic banks.

40. • Banking industry faces a high tax rate which
affects its profitability and attractiveness
for new entrants.
• Within the banking system, government
discharged Rs.10.5 billion to SBP against a
borrowing of Rs. 416.8 billion in the same
period last year.

41. Latest Updates
• On 20th October 2014, State Bank of Pakistan gave the
confirmation report on Merging of HSBC Bank into Meezan
Bank ltd. Therefore, Meezan bank also possessed all the
branch all business of HSBC Pakistan will automatically turn
business of Meezan Bank.es that HSBC had before.
• Like HSBC, Europe-based Barclays Bank is also withdrawal a
Pakistan marketplace for good.
• Recently, Habib Bank announced that it was negotiating
with Barclays Bank for a merger of a Pakistan operations.